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How Much Does Geothermal Heating Cost to Install? (2024 Update)

Furnaces are incredibly popular in the US. They are reliable, do a decent job of heating our houses, and last for a long time. However, compared to geothermal heating, they aren’t nearly as efficient. In the long run, a geothermal unit will be a better investment, thanks to lower energy bills. So, how much does this technology cost, exactly? Is this really going to be the right choice for your house, or not? How do you know what kind of a system to go for, in the first place? The national average for geothermal heating installation is $12K–$30K

Join us, and let’s find the answers to all these questions together!

divider 7 The Importance of Geothermal Heating

Did you know that the Earth maintains a steady temperature beneath the surface? That’s right, and the deeper you go, the higher the temps are. Geothermal technology takes advantage of this renewable source of energy. It’s good for the environment and has proven to be quite effective at heating and cooling. On average, a system based on geothermal heating can lower the monthly energy bill by up to 70%.

On top of that, it is 100% more efficient than the best air conditioners and around 50% more efficient than gas furnaces. How is this achieved? Well, with the heat pump doing most of the heavy lifting, the HVAC system gets to “rest” more. The pump is using the energy that is generated by the planet itself, while a furnace has to produce it. Geothermal heating costs 40% more than central heating, though.

How Much Does a Professional Geothermal Heating Installation Cost?

In 2022, the national average for geothermal heating installation is $12K–$30K. Most homeowners usually pay around $15K–$20K. For that kind of money, you’ll get a 4-ton system, good for 48K BTU. This is more than enough to adequately heat a 2.5K–3K-square feet home. The low-end cost is $8K–$9K, while the high-end cost is $40K–42K. The final cost depends on the soil, plot size, the condition of the house, and more.

The biggest factor that shapes the price is, of course, how many BTU you need, and the bigger the house, the more expensive geothermal heating will be. Now, if you only need the geothermal heating unit, without the installation, it will come in at around $2.5K–$7.5K ($1.5K–2.5K per ton).

  • The average cost in the US: $12K–$30K
  • How much most people pay: $15K–$20K
  • Low-end installation cost: $8K–$9K
  • High-end installation cost: $40K–$42K
  • Heating unit cost: $2.5K–$7.5K

Cost to Install Geothermal Heating by Different Regions

If you want closer estimates for the area that you live in, here’s a more detailed look at how much it costs to install a full-fledged geothermal heating system in different regions:

  • The East Coast: $14K–$32K
  • Midwest US: $10K–$28K
  • The West Coast: $12K–$30K

Cost to Install Geothermal Heating by Pump Type

When it comes to geothermal heat pumps, you can choose between two major types: open- and closed-loop. On average, an open-loop heat pump costs $12K–$16K; a closed-loop unit, in turn, is much more expensive: $11K–$32K. Open-loop pumps require specific conditions to work, though, and aren’t nearly as common. Only consider an open-loop pump if you live in an area with easy access to groundwater.

Closed-loop pumps are available in three different configurations, including lake, horizontal, and vertical. Don’t be shy to ask the contractor to help you with the choice, because for an amateur, it can be quite hard to figure out which system is best for their house:

  • Open-loop heat pump (cheap, but needs water and isn’t allowed in most cities): $12K–$16K
  • Closed-loop lake pump (no drilling involved, cheap to install): $15K–$20K
  • Closed-loop horizontal pump (highly efficient, but require lots of space): $12K–$26K
  • Closed-loop vertical pump (expensive, yet perfect for a limited footprint): $16K–$32K

How Much Does the Compressor Cost?

Let’s not forget about the unit that does all the hard work—the compressor. It boosts the heat coming in from underneath the ground to keep the house warm and can be single-, dual-, or variable-stage. Here’s how much you should expect to pay for each:

  • Single-stage compressor (cheap, yet not very efficient): $2.5K–$3.7K
  • Dual-stage compressor (low energy bills, steady performance): $3.3K–$5.8K
  • Variable-stage compressor (maximum efficiency, expensive): $4K–$7.5K
Water heater Pump
Image Credit: akiragiulia, Pixabay

Cost to Install Geothermal Heating by Pump Size

As mentioned, heat pumps for geothermal heating come in different sizes, measured in tons. One ton equals 12K BTU, while 5 tons equal 60K BTU. Here’s a quick look at close estimates based on the size of the pump (installation cost not included):

  • 1 ton/12K BTU: $1.5K–$2.5K
  • 2 tons/24K BTU: $3K–$5K
  • 3 tons/36K BTU: $4.5K–$7.5K
  • 4 tons/48K BTU: $6K–$10K
  • 5 tons/60K BTU: $7.5K–$12.5K

How Much Do Contractors Charge for the Job?

This largely depends on how much work the technicians will have to do. If you’re looking for a 360-degree service (digging, drilling, laying the pipes, connecting, and calibrating the system), that will cost $6K–$20K or 50–70% of the total cost. Make sure to get in contact with the company in advance to get a fixed price for the gig to avoid any misunderstanding.

A quick note: even if you’re on a tight budget, we’d still strongly recommend against handling the installation manually. A geothermal heating system is quite complex, and even digging out the trenches involves using specific equipment. As for all the “technical stuff”, it requires even more expertise and expensive tools.

Additional Costs to Anticipate

Just like in a gas furnace, the air filters in a geothermal heat pump need to be replaced quite often. On average, you should install new filters every 5–6 months. And if you live in a dusty area and have a couple of pets in the house, consider changing them every 2–3 months. As for an inspection, make a habit of having a technician over to perform it once in 4–5 years. Here’s how much these and other services will cost:

Additional Costs
  • Thorough inspection: $300–$800
  • Geothermal unit repair: $200–$1K
  • Brand-new filters: $40–$80
  • Ductwork cleaning: $200–$550
  • Duct zoning: $3K–$4K
  • Impact study: $700–$1.5K
  • Permit for the installation: $80–$800

divider 7

How Long Do Geothermal Units Last?

On average, a brand-new geothermal system (the heat pump) will serve you for 25–30 years. As for the underground loop—the pipes that run outside of the house—they will go on for 40–50 years. Besides, most geothermal units are backed by an 8–10-year warranty. Compared to a traditional furnace that most American homes are equipped with, this is quite an impressive lifespan.

Furnaces usually last for 15–20 years, or even less, depending on how well you take care of them. Central air conditioners have an even shorter lifespan: 10–15 years. Also, while the best furnaces work at 80%–90%, a properly installed and connected geothermal pump can work at 350%–400%. And it will still last longer.

How Do I Know Geothermal Heating Is Malfunctioning?

The main sign of a faulty geothermal system is an unusually high electric bill. A lack of proper airflow is another common side effect, along with poor heating/cooling efficiency, especially on cold winter days. Uneven cooling is yet another huge symptom of a failing unit. So, if you notice that some of the rooms in your house aren’t as warm as the rest of the spaces, that means it’s time to call in an inspector.

In some rare cases, you may also see leaks (from various components of the system) and strange noises and smells. However, these signs aren’t as common. Mostly, you’ll get steep bills and irregular heating for the whole house or different parts of it. As mentioned in the Additional Costs section, inspections by HVAC specialists don’t cost a lot but do help avoid expensive repairs.

Does Home Insurance Cover Geothermal Heating?

Wear, tear, poor maintenance, and accidents are usually not covered by homeowner’s insurance, as it all falls into the “Owner Neglect” category. That’s why it’s important to take proper care of the system and replace the filters in time. On the bright side, covered perils—disasters like fire damage, lightning, theft, or a fallen tree—will, most likely, be handled by the company.

It all comes down to what kind of an insurance deal you have and how much coverage it provides. For instance, a standard home insurance policy won’t pay for damages from floods or earthquakes. So, before you pay for certain insurance, learn in advance exactly what kinds of damages it will cover. On top of that, don’t forget to check out local government policies and incentives. Depending on the state, they can save you up to 30%!

divider 7 Conclusion

Geothermal heating isn’t particularly cheap; nor is it easy to install. However, it’s significantly more effective and efficient than any furnace out there. The lower electricity consumption, environment-friendly nature, and impressive lifespan make it worth your while. But, again, because of the steep price, you need to be 100% sure that you are, indeed, ready to commit.

Only consider geothermal heating if you’re planning on staying in the same house for at least 4–15 years. This way, it will not only pay for itself but also start saving you money on the energy bill. Clean, renewable energy is at the heart of this technology. If you’re an environmentally-conscious person, that’s even more reason to consider investing in it!

Featured Image Credit: Brian Babb, Unsplash


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